Canopy Growth continues to focus on the U.S. CBD market

Canopy Growth entered the U.S. market with a new CBD brand. The company launched its brand with a huge official presence in the U.S. market. Canopy’s new CBD product called “First and Free” will be available for sale in 31 states across the U.S., where cannabis products are legally available. The company planned earlier this year to open cannabis processing facilities in seven states within 2020.

The FDA has recently put a damper on the U.S. CBD market and has been very cautious about new CBD-based products. However, Canopy Growth still has its focus on the United States.

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FDA warns about the U.S. CBD market

The FDA recently announced that it does not currently have sufficient data on the safety of CBD-based products. Therefore, it is not possible to declare the U.S. CBD market safe for use by humans and animals.

This caused unrest in the cannabis industry and prompted economists to lower estimates for the U.S. CBD market.

Canopy Growth, however, does not seem to see that as a reason to avoid the market in the south. After all, CBD products are very popular in the U.S. and are legal in 31 states, meanwhile, the Canadian market remains weak.

Canopy
Growth enters the U.S. CBD market

The “First and Free” brand is to be available in all U.S. states in which CBD is legal. Gels, oils, and creams for external use are to be sold on the U.S. CBD market.

The FDA announced that the North American CBD market is not safe for humans or animals. (Source)

Canopy Growth has also taken the FDA’s testimony
into account and announced on the website that the statements on the products
have not been evaluated by the FDA and that the products are not designed to
diagnose, treat, cure or prevent disease.

The decline of cannabis stocks

In the past few months, cannabis stocks have seen a
considerable decline in some areas. The cannabis industry continues to find it
difficult to generate profits, and the Canadian cannabis market, in particular,
has been hard on producers.

Analyst Bill Kirk of MKM recently announced that
Canopy Growth is expected to post EPS losses by 2022.

Kirk stated that current spending is only the
beginning of what is needed to take advantage of profitable opportunities in
the future. The existing agribusiness is expected to remain under pressure with
supply growth.

Canopy
Growth’s brand differentiation

Stocks have experienced variations as the cannabis business pushes for more supply. (Source)

It is also difficult for Canopy Growth to
differentiate its own brands on the U.S. CBD market. However, the company could
benefit from the comparatively better R&D measures made possible by
Constellation Brands’ involvement.

“We have built our hemp supply chain in the
United States through partnering with a diverse group of contract farmers and
manufacturers across several states for the cultivation, extraction,
processing, and production of hemp-derived products,” the company said in
the financial documents released last month.

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Daphne Freeman has worked in the crowdfunding and impact investing industry for the past few years, gaining experience in marketing, and connecting businesses and entrepreneurs in need with the right investors. As a seasoned grant writer as well as financial market journalist, she is passionate about making a social impact in the world. A free spirit, Daphne also enjoys writing and exploring topics of interest, currently CBD, health and beauty, and social media influencers.

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